Justia Illinois Supreme Court Opinion Summaries

In 2014, a $30,880 judgment covering backpay and pre-judgment interest was entered against Oakridge Nursing & Rehabilitation Center, LLC, for its age and disability discrimination against a former employee, in violation of the Illinois Human Rights Act, 775 ILCS 5/1-101. Oakridge Rehab had already gone out of business and transferred the assets and operation of its nursing home facility to Oakridge Healthcare Center, LLC in 2012. Unable to enforce the judgment against Oakridge Rehab, the state instituted proceedings to enforce the judgment against Oakridge Healthcare.The Illinois Supreme Court ruled in favor of Oakridge Healthcare, declining to adopt the federal successor liability doctrine in cases arising under the Human Rights Act. The court noted four limited exceptions to the general rule of nonliability for corporate successors and declined to apply the fraudulent purpose exception, which exists “where the transaction is for the fraudulent purpose of escaping liability for the seller’s obligations.” The court stated that it is within the legislature’s power to abrogate the common-law rule of successor nonliability or otherwise alter its standards through appropriately targeted legislation for employment discrimination cases. View "Department of Human Rights v. Oakridge Healthcare Center, LLC" on Justia Law

In 1987, Whitaker opened commodity futures trading accounts that eventually were assigned to Wedbush. Whitaker did not enter into a new customer or security agreement with Wedbush. Wedbush held Whitaker’s funds in customer segregated accounts at BMO Harris, which provided an online portal for Wedbush to process its customers' wire transfers. In December 2014, Wedbush received emailed wire transfer requests purporting to be from Whitaker but actually sent by a hacker. Wedbush completed transfers to a bank in Poland totaling $374,960. Each time, Wedbush sent an acknowledgment to Whitaker’s e-mail account; the hacker apparently intercepted all email communications. Whitaker contacted Wedbush after receiving an account statement containing an incorrect balance. After Wedbush refused Whitaker’s demand for the return of the transferred funds, Whitaker filed suit seeking a refund under the UCC (810 ILCS 5/4A-101). The circuit court rejected the UCC counts, stating that Wedbush had not operated as a “bank” under the UCC definition. The appellate court affirmed.The Illinois Supreme Court reversed, rejecting an argument that an entity may not qualify as a bank if it does not offer checking services. Courts construe the term “bank” in article 4A liberally to promote the purposes and policies of the UCC. The term “includes some institutions that are not commercial banks” and that “[t]he definition reflects the fact that many financial institutions now perform functions previously restricted to commercial banks, including acting on behalf of customers in funds transfers.” View "Whitaker v. Wedbush Securities, Inc." on Justia Law

Plaintiffs purchased a recreational vehicle (RV) from Vacationland for $26,000.25. When it leaked during a rainstorm, they brought it in for repair. When it leaked again, causing extensive damage, they brought it back. A little more than two weeks after they dropped it off the second time and without a timetable for when the vehicle would be repaired, they told the seller that they no longer wanted the RV and asked for their money back. Plaintiffs sued, citing revocation of acceptance under the Magnuson-Moss Warranty-Federal Trade Commission Improvement Act, 15 U.S.C. 2310(d); breach of implied warranty of merchantability under the Magnuson-Moss Act; revocation of acceptance and cancellation of contract under Illinois’s adoption of the Uniform Commercial Code; and return of purchase price under the UCC. Defendant argued that plaintiffs’ failure to give it a reasonable opportunity to cure was fatal to their claims. The circuit court granted the defendant summary judgment. The appellate court affirmed. Plaintiffs sought review of the revocation of acceptance claim under the UCC (810 ILCS 5/2- 608(1)(b)). The Illinois Supreme Court reversed. The plain language of subsection 2-608(1)(b) does not require that the buyer give the seller an opportunity to cure a substantial nonconformity before revoking acceptance. View "Accettura v. Vacationland, Inc." on Justia Law

Citibank provided sales financing to Illinois retailers who offered customers the option of financing their purchases, including the amount of Illinois tax due on the purchases. Citibank originated or acquired consumer charge accounts and receivables from the retailers on a non-recourse basis. When a customer financed a purchase using that account, Citibank remitted to the retailer the amount the customer financed, which included some or all of the purchase price and the sales tax owed based on the selling price. The retailers then remitted the sales tax to the state. Under the agreements between Citibank and the retailers, Citibank acquired “any and all applicable contractual rights relating thereto, including the right to any and all payments from the customers and the right to claim Retailer’s Occupation Tax (ROT) refunds or credits.” Citibank filed a claim for tax refunds under 35 ILCS 120/6 for ROT taxes paid through retailers on transactions that ultimately resulted in uncollectible debt. The Department denied Citibank’s claim. The Illinois Supreme Court reinstated the denial, noting the legislature’s clearly expressed preference in the statutory framework for reporting, remission, and refund only through the retailer. Sophisticated lending institutions no doubt anticipate the eventuality of default and can order their commercial relationships accordingly. View "Citibank, N.A. v. Illinois Department of Revenue" on Justia Law

Aspen American Insurance sued, claiming that the roof of a Michigan warehouse owned by Interstate had collapsed, causing the destruction of goods owned by Aspen’s insured, Eastern Fish. The complaint alleged that Interstate “maintain[s] a facility in or near Chicago.” Interstate acknowledged that it owns a warehouse in Joliet, Illinois. Interstate, an Indiana corporation, unsuccessfully moved to dismiss the complaint for lack of personal jurisdiction. The appellate court affirmed. The Illinois Supreme Court reversed. Aspen did not show that Interstate’s contacts with Illinois render it at home in that state under subsection (c) of the long-arm statute, 735 ILCS 5/2-209. While a foreign corporation must register with the Secretary of State and appoint an agent to accept service of process in order to conduct business in Illinois, absent any language to the contrary, the fact that a foreign corporation has registered to do business does not mean that the corporation has waived due process limitations on the exercise of personal jurisdiction, including with respect to cases that are completely unrelated to the corporation’s activities in Illinois. View "Aspen American Insurance Co. v. Interstate Warehouseing, Inc." on Justia Law

LVNV collection agency bought Trice’s unpaid debt and filed suit. Trice later sought to vacate a judgment against him on the ground that LVNV was not an Illinois registered agency. The circuit court of Cook County declared sections of the Collection Agency Act (225 ILCS 425/4.5, 14, 14b) unconstitutional. The appellate court remanded after holding that “a complaint filed by an unregistered collection agency is … a nullity, and any judgment entered on such a complaint is void/” The circuit court then found the penalty provisions unconstitutional on grounds of due process, equal protection and vagueness, but held that though LVNV was unlicensed when it filed suit, the resulting judgment should have been “voidable rather than void.” The Illinois Supreme Court vacated the circuit court’s findings, rejected the analysis of the appellate court, and remanded. The circuit court’s initial denial of Trice’s petition was correct, LVNV has been granted relief on a nonconstitutional ground. Failure to comply with a statutory requirement or prerequisite does not negate the circuit court’s subject matter jurisdiction or constitute a nonwaivable condition precedent to that jurisdiction, so there was no need for the circuit court to address the Act’s constitutionality. View "LVNV Funding, LLC v. Trice" on Justia Law

The Illinois Department of Labor sent Jack’s Roofing a notice of investigation of possible violation of the Employee Classification Act, 820 ILCS 185/3.25 by misclassifying employees as independent contractors. Jack’s provided the Department with requested information. Preliminary determination found misclassification of 10 individuals for eight to 160 days and calculated a potential penalty of $1,683,000. The Department requested a response within 30 days for consideration before final determination. Less than a month later, the Department sent notice of a second investigation Jack's sought injunctive relief and a declaratory judgment that the Act is unconstitutional as violating: the special legislation clause of the Illinois Constitution because it subjects the construction industry to more stringent employment standards than other industries; the due process clauses of the U.S. and Illinois Constitutions because it does not provide an opportunity to be heard and is impermissibly vague; the U.S. Constitution's prohibition against bills of attainder because it is a legislative act that inflicts punishment without a judicial trial; and the equal protection clauses of both constitutions because no other industry is subjected to the same standards when seeking to hire independent contractors. On remand, the court denied relief, finding the Act valid and enforceable. The appellate court affirmed. The Illinois Supreme Court affirmed in part, rejecting facial constitutional challenges. A procedural due process challenge to enforcement provisions has been rendered moot by the recent amendments to the Act, which must be applied to plaintiffs in the future. The court also affirmed that section 10 of the Act is not unconstitutionally vague. Remaining constitutional challenges to the Act were forfeited. View "Bartlow v. Costigan" on Justia Law

Plaintiffs are minority limited partners in Urban Shopping Centers, L.P., in which defendants acquired a majority interest in 2002. Plaintiffs allege breach of fiduciary and contractual duties, claiming that, pursuant to the operating agreement, defendants were not to compete with them in business opportunities. They alleged that defendants stopped growing plaintiffs’ business, disregarded partnership agreement terms, and stole plaintiffs’ opportunities. During discovery, plaintiffs moved to compel production of documents concerning business negotiations in which each defendant’s attorney discussed with nonclients liability and obligations as Urban’s general partner and use of a “synthetic partnership” to avoid partnership obligations. Defendants claimed privilege, but plaintiffs argued that, having disclosed legal advice on these subjects with each other outside of any confidential relationship, defendants could not later object that those subjects were privileged. The motion was granted; defendants refused to comply and were held in contempt. The appellate court affirmed. The supreme court reversed, holding that attorney-client privilege had not been waived because the sought-after disclosures had occurred in an extrajudicial context and were not thereafter used by the clients to gain a tactical advantage in litigation. The “subject-matter waiver” doctrine was not shown to be applicable.View "Ctr. Partners, Ltd. v. Growth Head GP, LLC, " on Justia Law

In 2009, plaintiffs alleged that the defendants, in 1999 and 2000, marketed and sold to them investments, known as the 1999 Digital Options Strategy and the 2000 COINS Strategy, which were promoted as producing profits and reducing tax liabilities. Plaintiffs were charged substantial fees, but the promised benefits did not occur. The parties agree that the five-year statute of limitations for actions not otherwise provided for is applicable. The circuit court dismissed; the appellate court reversed and remanded. The Illinois Supreme Court affirmed, applying the “discovery rule” that a limitation period begins to run when the plaintiff knows or reasonably should know of the injury and its wrongful cause. The limitation period began to run when the IRS issued deficiency notices to plaintiffs in 2008. The complaint adequately alleged breach of fiduciary duty; that there was no basis for dismissing the claim as legally insufficient.View "Khan v. Deutsche Bank AG" on Justia Law

Lawlor worked for NA, selling corporate promotional items. In 2005, she began working for a competitor. NA’s attorney, investigating whether she had violated a noncompetition agreement, retained a private investigating firm, giving Lawlor’s birth date, address, phone numbers, and social security number. That firm asked another agency to use the information to obtain personal phone records, which were forwarded to NA for determination of whether any numbers belonged to its customers. Lawlor’s tort claim alleged “pretexting,” that someone impersonated her to obtain phone records without permission. NA counterclaimed breach of fiduciary duty of loyalty by attempting to direct business to a competitor while employed. A jury awarded Lawlor $65,000 in compensatory damages and $1.75 million in punitive damages. The court heard NA’s claim, awarded $78,781 in compensatory damages and $551,467 in punitive damages, and remitted the jury’s punitive damage award to $659,000. The appellate court reinstated Lawlor’s punitive damage award. The Supreme Court held that there was sufficient evidence that NA was vicariously liable for the tortious intrusion upon seclusion by the investigators. Punitive damages should be reduced to $65,000, given the limited harm and the vicarious nature of the liability. The court agreed that evidence of breach of fiduciary duty was speculative. View "Lawlor v. N. Am. Corp. of IL" on Justia Law